In the United States v. Gilliland et al., 1940, the Supreme Court ruled on a case involving fraudulent claims made to federal agencies. The defendants were charged with conspiracy to defraud the U.S by submitting false statements about oil production in order to evade regulations during an era of petroleum conservation efforts. They argued that their actions did not constitute a crime because they had not cheated the government out of property or money, but rather regulatory compliance information. However, this argument was rejected by Justice Owen Roberts and his colleagues who unanimously held that fraud could encompass more than just monetary or property loss; it also included "any impairment of a governmental function." Therefore, making false statements which interfered with lawful government functions constituted as defrauding the United States under section 37 of the Criminal Code even if there was no tangible financial loss involved.

In the dissenting opinion for United States v. Gilliland et al., Justice McReynolds disagreed with the majority's interpretation of the False Statements Act, arguing that it was intended to cover only those false statements made in matters relating to war or national defense. He contended that expanding its scope beyond this original intent would lead to an overreach of federal power and a potential misuse of authority by government officials. Furthermore, he expressed concern about criminalizing false statements without requiring proof of fraudulent intent or actual harm caused by such falsehoods. In his view, this could potentially make criminals out of innocent people who unknowingly provide incorrect information on trivial matters within governmental purview.